Lenders extend more yuan loans in June
By Feng Jianmin |
July 13, 2012, Friday
|
Print Edition
Print Edition
Chinese banks lent surprisingly more in June as the government's efforts to boost the economy took effect, and analysts foresaw more easing measures to offset an outflow of foreign currencies.
Banks extended 919.8 billion yuan (US$144.3 billion) of yuan loans in June, the People's Bank of China said in a statement yesterday. That was higher than the expected 880 billion yuan compiled by a Bloomberg News survey, and 793.2 billion yuan in May.
M2, the broadest measure of money supply, rose 13.6 percent from a year earlier in June, 0.4 percentage point faster than that in May, the central bank said.
The growth was in line with Premier Wen Jiabao's pledge during the weekend to "preset and fine-tune policies in a more aggressive manner" as the economy faces stronger downward pressure.
"The increases in credit and money supply indicated the policies to stabilize economic growth are showing effect," said Wang Tao, an economist at UBS AG in Hong Kong. "It's very likely that China's growth will recover in the second half."
China's second-quarter gross domestic product growth figure is due out today, and analysts expected the figure to fall to a three-year-low of below 8 percent.
An outflow of foreign currencies in the second quarter also aroused hopes for more measures to be eased.
The country's foreign currency reserve, the world's largest, fell to US$3.24 trillion by the end of June from US$3.3 trillion at the end of March.
Chinese banks bought 49 billion yuan worth of foreign currencies in June, more than the 23.4 billion yuan in May, the central bank's data showed.
Analysts said the increase was due to a rebound in the trade surplus to US$31.7 billion and stable foreign direct investment. But China still faces pressure of foreign currency outflow following the slowdown in the yuan's appreciation.
"That may force the central bank to cut reserve requirements for banks in the third quarter to replenish liquidity," said Zhou Wenyuan, a chief researcher with Guotai Junan Securities Co.
Banks extended 919.8 billion yuan (US$144.3 billion) of yuan loans in June, the People's Bank of China said in a statement yesterday. That was higher than the expected 880 billion yuan compiled by a Bloomberg News survey, and 793.2 billion yuan in May.
M2, the broadest measure of money supply, rose 13.6 percent from a year earlier in June, 0.4 percentage point faster than that in May, the central bank said.
The growth was in line with Premier Wen Jiabao's pledge during the weekend to "preset and fine-tune policies in a more aggressive manner" as the economy faces stronger downward pressure.
"The increases in credit and money supply indicated the policies to stabilize economic growth are showing effect," said Wang Tao, an economist at UBS AG in Hong Kong. "It's very likely that China's growth will recover in the second half."
China's second-quarter gross domestic product growth figure is due out today, and analysts expected the figure to fall to a three-year-low of below 8 percent.
An outflow of foreign currencies in the second quarter also aroused hopes for more measures to be eased.
The country's foreign currency reserve, the world's largest, fell to US$3.24 trillion by the end of June from US$3.3 trillion at the end of March.
Chinese banks bought 49 billion yuan worth of foreign currencies in June, more than the 23.4 billion yuan in May, the central bank's data showed.
Analysts said the increase was due to a rebound in the trade surplus to US$31.7 billion and stable foreign direct investment. But China still faces pressure of foreign currency outflow following the slowdown in the yuan's appreciation.
"That may force the central bank to cut reserve requirements for banks in the third quarter to replenish liquidity," said Zhou Wenyuan, a chief researcher with Guotai Junan Securities Co.
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